Conditions of Contract for Construction MDB HARMONISED EDITION FOR BUILDING AND ENGINEERING WORKS DESIGNED BY THE EMPLOYER GENERAL CONDITIONS PARTICULAR CONDITIONS SAMPLE FORMS SBN – 88432 – 044 – XMONISED ===>>>>> INTRODUCTION A number of the Multilateral Development Banks (MDBs) have for many years adopted the FIDIC Conditions of Contract for Construction as part of the Standard Bidding Documents which the MDBs require their borrowers or aid recipients to follow In using the FIDIC Conditions it has been the regular practice of the MDBs to introduce additional Clauses in the Conditions of Particular Application (or “Particular Conditions”) in order to amend provisions contained in the FIDIC General Conditions These additional clauses in many cases have standard wording which has to be repeated whenever procurement documents are being prepared for a new project Furthermore, the provisions in bid documents, including the additional clauses contained in the Particular Conditions, varied between the MDBs, and this created inefficiencies and uncertainties amongst the users of the documents, and increased the possibilities for disputes These problems were recognised by the Heads of Procurement (HOPs) of the MDBs as significant, as were the benefits of standardisation In response, the HOPs resolved to harmonise their bid documents on an international basis, by making use of the FIDIC General Conditions For this purpose, the HOPs further resolved that there should be a modified form of the FIDIC Conditions of Contract for Construction, 1st Edition 1999, in which the General Conditions would contain the standard wording which previously has been incorporated by MDBs in the Particular Conditions FIDIC also recognised the major benefits to the users of the contracts of harmonisation and the inclusion in the General Conditions of the main common changes required by Particular Conditions in MDB contracts Accordingly, the Federation was pleased to work with the HOPs to produce this MDB Harmonised Edition of the 1999 Conditions for MDB financed contracts It is believed that the modified, or harmonised document, will simplify use of the FIDIC Conditions of Contract not only for the MDBs and their borrowers, but also for others involved with project procurement, such as consulting engineers, contractors and contract specialists working on MDB financed projects Use of the harmonised conditions should significantly reduce the number of additions and amendments to be included in the Particular Conditions Nevertheless, most projects will have special requirements which will necessitate some specific changes This harmonised document therefore contains provision for Particular Conditions, as has become the practice in other FIDIC documents This MDB Harmonised Edition also includes sample forms for Contract Data (Particular Conditions - Part A), Securities, Bonds, Guarantees and Dispute Board agreements In general, this harmonised document follows earlier FIDIC risk sharing principles for the types of contract for which they were prepared In most cases, the amendments which have been made to produce the MDB Harmonised Edition of the FIDIC General Conditions for Construction are those arising from the requirements of the MDBs, except for some minor changes of an editorial nature However, in the case of the dispute provisions contained in Clauses 20.2 to 20.8 and in the associated Appendix, the opportunity has been taken to make other ===>>>>> amendments which FIDIC considers an improvement on earlier wording in the Construction Contract, 1st Edition 1999 The insurance provisions given in Clause 18 of the document remain unchanged from the 1st Edition 1999, although some commentators have suggested an alternative approach to dealing with this specialised topic In particular, Employers may wish to consider arranging for a dedicated single policy for the project which would cover all necessary insurances The advantage of such an approach is that it would avoid gaps or other misunderstandings in the insurances provided, including possible duplication of cover If an Employer decides to arrange a single insurance policy, then a copy of that policy should be made available to tenderers during the tender period FIDIC recommends that Employers should obtain, at an early stage of project procurement, expert advice on insurance matters The MDBs listed in the section “Participating Banks” have participated in the preparation of the MDB Harmonised Edition It is understood that all of them will adopt this edition of the FIDIC document in their Standard Bidding Documents A draft of this MDB Harmonised Edition was circulated for comment to interested parties, prior to its finalization All of the comments received were considered by FIDIC and some have been incorporated Other comments will be reviewed again when in due course FIDIC produces a second edition of its Construction Contract The contribution of the FIDIC Contracts Committee to the preparation of this Harmonised Edition is acknowledged The Contracts Committee comprises Christopher Wade (Chairman), Nael Bunni, Axel-Volkmar Jaegar, Philip Jenkinson and Michael Mortimer-Hawkins together with John B Bowcock as Special Advisor and Christopher R Seppala as Legal Adviser It is noted that all were also involved, together with others, in the preparation of the 1999 Edition of the Conditions of Contract for Construction (refer to Acknowledgements in that document) FIDIC wishes to record it appreciation of the time and effort devoted by all of the above ===>>>>> Terms and Conditions of Use The Multilateral Development Banks (MDBs) started releasing in May 2005 Standard Bidding Documents (SBDs) for the procurement of works that conformed, “to the extent possible without contravening their procurement guidelines”, to the model provided by the Master Procurement Document for Procurement of Works & User’s Guide harmonised among the various MDBs and approved by the MDB Heads of Procurement and International Financial Institutions in October 2004 The MDB harmonised Master Procurement Document for Procurement of Works & User’s Guide incorporates General Conditions of a MDB Harmonised Edition of the FIDIC Conditions of Contract for Construction, which text has been agreed by FIDIC and various MDBs for inclusion in the Master Procurement Document for Procurement of Works & User’s Guide FIDIC and the MDBs, collectively known as Participating Banks, have separately executed a licence agreement in several counterparts, each of which is deemed an original, but all of which together constitute one and the same agreement This agreement regulates the terms and conditions of use of the MDB Harmonised General Conditions It indicates that: - - the Participating Banks wish to allow their borrowers, including any entity implementing, on behalf of a borrower, an investment project financed by one or more of the Participating Banks (“Executing Agency”), to use the MDB Harmonised General Conditions free of any charges, even if bidders may be required, in some cases, to pay for the SBDs at cost; FIDIC and the Participating Banks have together negotiated the terms of a licence agreement so that any Participating Bank that chooses to have the terms and conditions of the licence agreement apply to it and its borrowers and Executing Agencies, shall execute a bilateral licence agreement with FIDIC on substantially the same terms and conditions, upon which execution it will become a Licensed Participating Bank ===>>>>> GENERAL CONDITIONS PARTICULAR CONDITIONS Conditions of Contract for CONSTRUCTION SAMPLE FORMS FOR BUILDING AND ENGINEERING WORKS DESIGNED BY THE EMPLOYER Multilateral Development Bank Harmonised Edition May 2005 General Conditions This publication is exclusive for use as provided under a Licence Agreement between a Participating Bank and FIDIC, and, consequently, no part of this publication may be reproduced, translated, adapted, stored in a retrieval system or communicated, in any form or by any means, whether mechanical, electronic, magnetic, photocopying, recording or otherwise, without prior permission in writing from FIDIC To request such permission, please contact: FIDIC, Case Postale 311, CH-1215 Geneva 15, Switzerland; Tel +41 22 799 49 00; Fax +41 22 799 49 01; E-mail: fidic@fidic.org FIDIC is not responsible for the accuracy or completeness of translations of this publication unless such translation explicitly indicates otherwise ===>>>>> General Conditions CONTENTS Definitions listed alphabetically GENERAL PROVISIONS Definitions Interpretation Communications Law and Language Priority of Documents Contract Agreement Assignment Care and Supply of Documents Delayed Drawings or Instructions Employer’s Use of Contractor’s Documents Contractor’s Use of Employer’s Documents Confidential Details Compliance with Laws Joint and Several Liability Inspections and Audit by the Bank THE EMPLOYER Right of Access to the Site Permits, Licences or Approvals Employer’s Personnel Employer’s Financial Arrangements Employer’s Claims THE ENGINEER 10 Engineer’s Duties and Authority Delegation by the Engineer Instructions of the Engineer Replacement of the Engineer Determinations THE CONTRACTOR 13 Contractor’s General Obligations Performance Security i © FIDIC 2005 MDB Harmonised Conditions of Contract for Construction - General Conditions ===>>>>> Contractor’s Representative Subcontractors Assignment of Benefit of Subcontract Co-operation Setting Out Safety Procedures Quality Assurance Site Data Sufficiency of the Accepted Contract Amount Unforeseeable Physical Conditions Rights of Way and Facilities Avoidance of Interference Access Route Transport of Goods Contractor’s Equipment Protection of the Environment Electricity, Water and Gas Employer’s Equipment and Free-Issue Material Progress Reports Security of the Site Contractor’s Operations on Site Fossils NOMINATED SUBCONTRACTORS 22 Definition of “nominated Subcontractor” Objection to Nomination Payments to nominated Subcontractors Evidence of Payments STAFF AND LABOUR 23 Engagement of Staff and Labour Rates of Wages and Conditions of Labour Persons in the Service of Employer Labour Laws Working Hours Facilities for Staff and Labour Health and Safety Contractor’s Superintendence Contractor’s Personnel Records of Contractor’s Personnel and Equipment Disorderly Conduct Foreign Personnel Supply of Foodstuffs Supply of Water Measures against Insect and Pest Nuisance Alcoholic Liquor or Drugs Arms and Ammunition Festival and Religious Customs Funeral Arrangements Prohibition of Forced or Compulsory Labour Prohibition of Harmful Child Labour Employment Records of Workers ii © FIDIC 2005 MDB Harmonised Conditions of Contract for Construction - General Conditions PLANT, MATERIALS AND WORKMANSHIP 27 ===>>>>> Manner of Execution Samples Inspection Testing Rejection Remedial Work Ownership of Plant and Materials Royalties COMMENCEMENT, DELAYS AND SUSPENSION 29 Commencement of Works Time for Completion Programme Extension of Time for Completion Delays Caused by Authorities Rate of Progress Delay Damages Suspension of Work Consequences of Suspension Payment for Plant and Materials in Event of Suspension Prolonged Suspension Resumption of Work TESTS ON COMPLETION 32 Contractor’s Obligations Delayed Tests Retesting Failure to Pass Tests on Completion 10 EMPLOYER’S TAKING OVER 33 Taking Over of the Works and Sections Taking Over of Parts of the Works Interference with Tests on Completion Surfaces Requiring Reinstatement 11 DEFECTS LIABILITY 35 Completion of Outstanding Work and Remedying Defects Cost of Remedying Defects Extension of Defects Notification Period Failure to Remedy Defects Removal of Defective Work Further Tests Right of Access Contractor to Search Performance Certificate Unfulfilled Obligations Clearance of Site iii © FIDIC 2005 MDB Harmonised Conditions of Contract for Construction - General Conditions ===>>>>> 12 MEASUREMENT AND EVALUATION 38 Works to be Measured Method of Measurement Evaluation Omissions 13 VARIATIONS AND ADJUSTMENTS 39 Right to Vary Value Engineering Variation Procedure Payment in Applicable Currencies Provisional Sums Daywork Adjustments for Changes in Legislation Adjustments for Changes in Cost 14 CONTRACT PRICE AND PAYMENT 43 The Contract Price Advance Payment Application for Interim Payment Certificates Schedule of Payments Plant and Materials intended for the Works Issue of Interim Payment Certificates Payment Delayed Payment Payment of Retention Money Statement at Completion Application for Final Payment Certificate Discharge Issue of Final Payment Certificate Cessation of Employer’s Liability Currencies of Payment 15 TERMINATION BY EMPLOYER 51 Notice to Correct Termination by Employer Valuation at Date of Termination Payment after Termination Employer’s Entitlement to Termination for Convenience Corrupt or Fraudulent Practices 16 SUSPENSION AND TERMINATION BY CONTRACTOR 53 Contractor’s Entitlement to Suspend Work Termination by Contractor Cessation of Work and Removal of Contractor’s Equipment Payment on Termination 17 RISK AND RESPONSIBILITY 55 Indemnities ===>>>>> Contractor’s Care of the Works iv © FIDIC 2005 MDB Harmonised Conditions of Contract for Construction - General Conditions Employer’s Risks Consequences of Employer’s Risks Intellectual and Industrial Property Rights Limitation of Liability Use of Employer’s Accommodation/Facilities 18 INSURANCE 58 General Requirements for Insurances Insurance for Works and Contractor’s Equipment Insurance against Injury to Persons and Damage to Property Insurance for Contractor’s Personnel 19 FORCE MAJEURE 61 Definition of Force Majeure Notice of Force Majeure Duty to Minimise Delay Consequences of Force Majeure Force Majeure Affecting Subcontractor Optional Termination, Payment and Release Release from Performance 20 CLAIMS, DISPUTES AND ARBITRATION 63 Contractor’s Claims Appointment of the Dispute Board Failure to Agree on the Composition of the Dispute Board Obtaining Dispute Board’s Decision Amicable Settlement Arbitration Failure to Comply with Dispute Board’s Decision Expiry of Dispute Board’s Appointment APPENDIX: DISPUTE BOARD 68 General Conditions of Dispute Board Agreement Annex: Procedural Rules INDEX OF SUB-CLAUSES 75 Definitions listed alphabetically 1.1.4.1 Accepted Contract Amount 1.1.4.7 Interim Payment Certificate ===>>>>> 10 GENERAL CONDITIONS PARTICULAR CONDITIONS Conditions of Contract for CONSTRUCTION SAMPLE FORMS FOR BUILDING AND ENGINEERING WORKS DESIGNED BY THE EMPLOYER Multilateral Development Bank Harmonised Edition 2005 Sample Forms This section contains sample forms which form part of the Contract They are subdivided into Forms of Letter of Bid, Letter of Acceptance, Contract Agreement and Dispute Board Agreement and Forms of Security annexed to the Particular Conditions Forms of Guarantee are annexed to the Instructions to Tenderers MDBs generally provide sample forms of Letter of Bid (or Tender), Letter of Acceptance and Contract Agreement in their Bidding Documents Additional forms are taken from the FIDIC Construction Contract, 1st Edition 1999, in some cases with minor modifications to comply with the wording of the MDB Harmonised General Conditions FEDERATION INTERNATIONALE DES INGENIEURS-CONSEILS INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS INTERNATIONALE VEREINIGUNG BERATENDER INGENIEURE FEDERACION INTERNACIONAL DE INGENIEROS CONSULTORES ===>>>>> 94 Sample Forms CONTENTS Forms of Letter of Bid, Letter of Acceptance, Contract Agreement and Dispute Board Agreement Annex Annex Annex Annex Annex Letter of Bid Letter of Acceptance Contract Agreement Dispute Board Agreement (one-person DB) Dispute Board Agreement (each person of a three-person DB) Forms of Security annexed to the Particular Conditions Annex Annex Annex Annex A B C D E F G H I Performance Security: Demand Guarantee Performance Security: Performance Bond Advance Payment Security: Demand Guarantee Retention Money Security: Demand Guarantee Forms of Guarantee annexed to the Instructions to Tenderers Annex J Parent Company Guarantee Annex K Bid Security: Bank Guarantee FIDIC MDB ConditiFoInDsICofMCDoBntC raocntdfoitrioC no s nosftrCuocntitorna,ctMfo DrBCHoanrsm tro uncitsioend, EMdDitB ionH2 a0 rm 05 on-isSeadmEpdleitioFnor2m0s05 - Sample Forms ===>>>>> 95 Annex A LETTER OF BID [ All italicized text and any enclosing square brackets is for use in preparing the form and should be deleted from the final product.] Date: ICB No.: Invitation for Bid No.: To: We, the undersigned, declare that: (a) We have examined and have no reservations to the Bidding Document, including Addenda issued in accordance with Instructions to Bidders (ITB) [ Number ]; (b) We offer to execute in conformity with the Bidding Document the following Works ; (c) The total price of our Bid, excluding any discounts offered in item (d) below is: ; (d) The discounts offered and the methodology for their application are: ; ; (e) Our bid shall be valid for a period of days from the date fixed for the bid submission deadline in accordance with the Bidding Document, and it shall remain binding upon us and may be accepted at any time before the expiration of that period; (f) If our bid is accepted, we commit to obtain a performance security in accordance with the Bidding Document; (g) We, including any subcontractors or suppliers for any part of the contract, have or will have nationalities from eligible countries, in accordance with ITB [ Number ]; (h) We, including any subcontractors or suppliers for any part of the contract, not have any conflict of interest in accordance with ITB [ Number ]; (i) We are not participating, as a Bidder or as a subcontractor, in more than one bid in this bidding process in accordance with ITB [ Number ], other than alternative offers submitted in accordance with ITB [ Number ]; We, including any of our subcontractors or suppliers for any part of the contract, have not been declared ineligible by the Bank, under the Employer’s country laws or official regulations or by an act of compliance with a decision of the United Nations Security Council; (j) We are not a government owned entity [ or ] We are a government owned entity but meet the requirements of ITB (k) [ Number ]; We have paid, or will pay the following commissions, gratuities, or fees with respect to the bidding process or execution of the Contract: FIDIC MDB Conditions of Contract for Construction, MDB Harmonised Edition 2005 - Sample Forms ===>>>>> 96 Name of Recipient Address Reason Amount [ If none has been paid or is to be paid, indicate “none” ] (l) We understand that this bid, together with your written acceptance thereof included in your notification of award, shall constitute a binding contract between us, until a formal contract is prepared and executed; and (m) We understand that you are not bound to accept the lowest evaluated bid or any other bid that you may receive (n) We hereby certify that we have taken steps to ensure that no person acting for us or on our behalf will engage in bribery Name: Signed: in the capacity of: Duly authorized to sign the bid for and on behalf of: Dated on day of , FIDIC MDB Conditions of Contract for Construction, MDB Harmonised Edition 2005 - Sample Forms ===>>>>> 97 Annex B LETTER OF ACCEPTANCE [ All italicized text and any enclosing square brackets is for use in preparing the form and should be deleted from the final product.] [ Name and address of the Contractor ] This is to notify you that your Bid dated [ Date ] for execution of the [ Name of the Contract and identification number, as given in the Contract Data ] for the Accepted Contract Amount of the equivalent of [ Amount in numbers and words ] [ Name of currency ], as corrected and modified in accordance with the Instructions to Bidders, is hereby accepted by our Agency You are requested to furnish the Performance Security within 28 days in accordance with the Conditions of Contract, using for that purpose one of the Performance Security Forms included in the annexes to the Particular Conditions Authorized Signature: Name and Title of Signatory: Name of Agency: FIDIC MDB Conditions of Contract for Construction, MDB Harmonised Edition 2005 - Sample Forms ===>>>>> 98 Annex C CONTRACT AGREEMENT This Agreement made the between Employer”), of the one part, and “the Contractor”), of the other part: day of of , (hereinafter of , “the (hereinafter Whereas the Employer desires that the Works known as should be executed by the Contractor, and has accepted a Bid by the Contractor for the execution and completion of these Works and the remedying of any defects therein, The Employer and the Contractor agree as follows: In this Agreement words and expressions shall have the same meanings as are respectively assigned to them in the Contract documents referred to The following documents shall be deemed to form and be read and construed as part of this Agreement This Agreement shall prevail over all other Contract documents (i) (ii) (ii) (iv) (v) (vi) (vii) (viii) (ix) the Letter of Acceptance the Letter of Bid the addenda Nos the Particular Conditions - Part A the Particular Conditions - Part B the General Conditions the Specification the Drawings, and the completed Schedules, (if any) In consideration of the payments to be made by the Employer to the Contractor as indicated in this Agreement, the Contractor hereby covenants with the Employer to execute the Works and to remedy defects therein in conformity in all respects with the provisions of the Contract The Employer hereby covenants to pay the Contractor in consideration of the execution and completion of the Works and the remedying of defects therein, the Contract Price or such other sum as may become payable under the provisions of the Contract at the times and in the manner prescribed by the Contract In witness whereof the parties hereto have caused this Agreement to be executed in accordance with the laws of on the day, month and year indicated above Signed by: (for the Employer) Signed by: (for the Contractor) FIDIC MDB Conditions of Contract for Construction, MDB Harmonised Edition 2005 - Sample Forms ===>>>>> 99 Annex D DISPUTE BOARD AGREEMENT [ All italicized text and any enclosing square brackets is for use in preparing the form and should be deleted from the final product.] [ For a one-person DB ] Name and details of Contract Name and address of Employer Name and address of Contractor Name and address of Member Whereas the Employer and the Contractor have entered into the Contract and desire jointly to appoint the Member to act as sole Member who is also called the “DB” The Employer, Contractor and Member jointly agree as follows: The conditions of this Dispute Board Agreement comprise the “General Conditions of Dispute Board Agreement”, which is appended to the General Conditions of the “Conditions of Contract for Construction” MDB Harmonised Edition published by the Fédération Internationale des Ingénieurs-Conseils (FIDIC), and the following provisions In these provisions, which include amendments and additions to the General Conditions of Dispute Board Agreement, words and expressions shall have the same meanings as are assigned to them in the General Conditions of Dispute Board Agreement [Details of amendments to the General Conditions of Dispute Board Agreement, if any For example: In the procedural rules annexed to the General Conditions of Dispute Board Agreement, Rule is deleted and replaced by: “ ”] In accordance with Clause of the General Conditions of Dispute Board Agreement, the Member shall be paid as follows: A retainer fee of plus a daily fee of per calendar month, per day In consideration of these fees and other payments to be made by the Employer and the Contractor in accordance with Clause of the General Conditions of Dispute Board Agreement, the Member undertakes to act as the DB (as member) in accordance with this Dispute Board Agreement The Employer and the Contractor jointly and severally undertake to pay the Member, in consideration of the carrying out of these services, in accordance with Clause of the General Conditions of Dispute Board Agreement This Dispute Board Agreement shall be governed by the law of ===>>>>> 100 Annex E DISPUTE BOARD AGREEMENT [ All italicized text and any enclosing square brackets is for use in preparing the form and should be deleted from the final product.] [ For each member of a three-person DB ] Name and details of Contract Name and address of Employer Name and address of Contractor Name and address of Member Whereas the Employer and the Contractor have entered into the Contract and desire jointly to appoint the Member to act as one of the three persons who are jointly called the “DB” [ and desire the Member to act as chairman of the DB ] The Employer, Contractor and Member jointly agree as follows: The conditions of this Dispute Board Agreement comprise the “General Conditions of Dispute Board Agreement”, which is appended to the General Conditions of the “Conditions of Contract for Construction” MDB Harmonised Edition published by the Fédération Internationale des Ingénieurs-Conseils (FIDIC), and the following provisions In these provisions, which include amendments and additions to the General Conditions of Dispute Board Agreement, words and expressions shall have the same meanings as are assigned to them in the General Conditions of Dispute Board Agreement [Details of amendments to the General Conditions of Dispute Board Agreement, if any For example: In the procedural rules annexed to the General Conditions of Dispute Board Agreement, Rule is deleted and replaced by: “ ” ] In accordance with Clause of the General Conditions of Dispute Board Agreement, the Member shall be paid as follows: A retainer fee of plus a daily fee of per calendar month, per day In consideration of these fees and other payments to be made by the Employer and the Contractor in accordance with Clause of the General Conditions of Dispute Board Agreement, the Member undertakes to serve, as described in this Dispute Board Agreement, as one of the three persons who are jointly to act as the DB The Employer and the Contractor jointly and severally undertake to pay the Member, in consideration of the carrying out of these services, in accordance with Clause of the General Conditions of Dispute Board Agreement This Dispute Board Agreement shall be governed by the law of ===>>>>> 101 Annex F PERFORMANCE SECURITY Demand Guarantee [ All italicized text and any enclosing square brackets is for use in preparing the form and should be deleted from the final product.] Beneficiary: Date: [ Bank’s name, and address of issuing branch or office ] [ Name and Address of Employer ] Performance Guarantee No.: We have been informed that [ Name of Contractor ] (hereinafter called “the Contractor”) has entered into Contract No [ Reference number of the contract ] dated with you, for the execution of [ Name of contract and brief description of Works ] (hereinafter called “the Contract”) Furthermore, we understand that, according to the conditions of the Contract, a performance guarantee is required At the request of the Contractor, we [ Name of Bank ] hereby irrevocably undertake to pay you any sum or sums not exceeding in total an amount of [ Amount in figures ] ( ) [ Amount in words, see ], such sum being payable in the types and proportions of currencies in which the Contract Price is payable, upon receipt by us of your first demand in writing accompanied by a written statement stating that the Contractor is in breach of its obligation(s) under the Contract, without your needing to prove or to show grounds for your demand or the sum specified therein This guarantee shall expire, no later than the day of , [ see ], and any demand for payment under it must be received by us at this office on or before that date This guarantee is subject to the Uniform Rules for Demand Guarantees, ICC Publication No 458, except that subparagraph (ii) of Sub-article 20(a) is hereby excluded Signature(s): The Guarantor shall insert an amount representing the percentage of the Contract Price specified in the Contract and denominated either in the currency(cies) of the Contract or a freely convertible currency acceptable to the Employer Insert the date twenty-eight days after the expected completion date The Employer should note that in the event of an extension of the time for completion of the Contract, the Employer would need to request an extension of this guarantee from the Guarantor Such request must be in writing and must be made prior to the expiration date established in the guarantee In preparing this guarantee, the Employer might consider adding the following text to the form, at the end of the penultimate paragraph: “The Guarantor agrees to a one-time extension of this guarantee for a period not to exceed [six months] [one year], in response to the Employer's written request for such extension, such request to be presented to the Guarantor before the expiry of the guarantee.” ===>>>>> 102 Annex G PERFORMANCE SECURITYY Performance Bond By this Bond as Principal (hereinafter called “the Contractor”) and as Surety (hereinafter called “the Surety”), are held and firmly bound unto as Obligee (hereinafter called “the Employer”) in the amount of , for the payment of which sum well and truly to be made in the types and proportions of currencies in which the Contract Price is payable, the Contractor and the Surety bind themselves, their heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents Whereas the Contractor has entered into a written Agreement with the Employer dated the day of , , for in accordance with the documents, plans, specifications, and amendments thereto, which to the extent herein provided for, are by reference made part hereof and are hereinafter referred to as the Contract Now, therefore, the Condition of this Obligation is such that, if the Contractor shall promptly and faithfully perform the said Contract (including any amendments thereto), then this obligation shall be null and void; otherwise, it shall remain in full force and effect Whenever the Contractor shall be, and declared by the Employer to be, in default under the Contract, the Employer having performed the Employer's obligations thereunder, the Surety may promptly remedy the default, or shall promptly: (a) complete the Contract in accordance with its terms and conditions; or (b) obtain a Bid or bids from qualified Bidders for submission to the Employer for completing the Contract in accordance with its terms and conditions, and upon determination by the Employer and the Surety of the lowest responsive Bidder, arrange for a Contract between such Bidder and Employer and make available as work progresses (even though there should be a default or a succession of defaults under the Contract or Contracts of completion arranged under this paragraph) sufficient funds to pay the cost of completion less the Balance of the Contract Price; but not exceeding, including other costs and damages for which the Surety may be liable hereunder, the amount set forth in the first paragraph hereof The term “Balance of the Contract Price”, as used in this paragraph, shall mean the total amount payable by Employer to Contractor under the Contract, less the amount properly paid by Employer to Contractor; or (c) pay the Employer the amount required by Employer to complete the Contract in accordance with its terms and conditions up to a total not exceeding the amount of this Bond The Surety shall not be liable for a greater sum than the specified penalty of this Bond Any suit under this Bond must be instituted before the expiration of one year from the date of the issuing of the Taking-Over Certificate No right of action shall accrue on this Bond to or for the use of any person or corporation other than the Employer named herein or the heirs, executors, administrators, successors, and assigns of the Employer In testimony whereof, the Contractor has hereunto set his hand and affixed his seal, and the Surety has caused these presents to be sealed with his corporate seal duly attested by the signature of his legal representative, this day of , SIGNED ON: By: In the presence of: on behalf of: in the capacity of: SIGNED ON: By: In the presence of: on behalf of: in the capacity of: ===>>>>> 103 Annex H ADVANCE PAYMENT SECURITY Demand Guarantee [ All italicized text and any enclosing square brackets is for use in preparing the form and should be deleted from the final product.] Beneficiary: Date: [ Bank’s name, and address of issuing branch or office ] [ Name and Address of Employer ] Advance Payment Guarantee No.: We have been informed that [ Name of Contractor ] (hereinafter called “the Contractor”) has entered into Contract No [ Reference number of the contract ] dated with you, for the execution of [ Name of contract and brief description of Works ] (hereinafter called “the Contract”) Furthermore, we understand that, according to the conditions of the Contract, an advance payment in the sum [ Amount in figures ] ( ) [ Amount in words ] is to be made against an advance payment guarantee At the request of the Contractor, we [ Name of Bank ] hereby irrevocably undertake to pay you any sum or sums not exceeding in total an amount of [ Amount in figures ] ( ) [ Amount in words, see ] upon receipt by us of your first demand in writing accompanied by a written statement stating that the Contractor is in breach of its obligation under the Contract because the Contractor used the advance payment for purposes other than the costs of mobilization in respect of the Works It is a condition for any claim and payment under this guarantee to be made that the advance payment referred to above must have been received by the Contractor on its account number at [ Name and address of Bank ] The maximum amount of this guarantee shall be progressively reduced by the amount of the advance payment repaid by the Contractor as indicated in copies of interim statements or payment certificates which shall be presented to us This guarantee shall expire, at the latest, upon our receipt of a copy of the interim payment certificate indicating that eighty (80) percent of the Contract Price has been certified for payment, or on the day of , [ see ] whichever is earlier Consequently, any demand for payment under this guarantee must be received by us at this office on or before that date This guarantee is subject to the Uniform Rules for Demand Guarantees, ICC Publication No 458 Signature(s): The Guarantor shall insert an amount representing the amount of the advance payment and denominated either in the currency(ies) of the advance payment as specified in the Contract, or in a freely convertible currency acceptable to the Employer Insert the expected expiration date of the Time for Completion The Employer should note that in the event of an extension of the time for completion of the Contract, the Employer would need to request an extension of this guarantee from the Guarantor Such request must be in writing and must be made prior to the expiration date established in the guarantee In preparing this guarantee, the Employer might consider adding the following text to the form, at the end of the penultimate paragraph: “The Guarantor agrees to a one-time extension of this guarantee for a period not to exceed [six months][one year], in response to the Employer's written request for such extension, such request to be presented to the Guarantor before the expiry of the guarantee.” ===>>>>> 104 Annex I RETENTION MONEY SECURITY Demand Guarantee [ All italicized text and any enclosing square brackets is for use in preparing the form and should be deleted from the final product.] Beneficiary: Date: [ Bank’s name, and address of issuing branch or office ] [ Name and Address of Employer ] Retention Money Guarantee No.: We have been informed that [ Name of Contractor ] hereinafter called “the Contractor”) has entered into Contract No [ Reference number of the contract ] dated with you, for the execution of [ Name of contract and brief description of Works ] (hereinafter called “the Contract”) Furthermore, we understand that, according to the conditions of the Contract, when the TakingOver Certificate has been issued for the Works and the first half of the Retention Money has been certified for payment, payment of [ Insert “the second half of the Retention Money” or if the amount guaranteed under the Performance Guarantee when the Taking-Over Certificate is issued is less than half of the Retention Money, “the difference between half of the Retention Money and the amount guaranteed under the Performance Security” ] is to be made against a Retention Money guarantee At the request of the Contractor, we [ Name of Bank ] hereby irrevocably undertake to pay you any sum or sums not exceeding in total an amount of [ Amount in figures ] ( ) [ Amount in words, see ] upon receipt by us of your first demand in writing accompanied by a written statement stating that the Contractor is in breach of its obligation under the Contract because the Contractor used the advance payment for purposes other than the costs of mobilization in respect of the Works It is a condition for any claim and payment under this guarantee to be made that the payment of the second half of the Retention Money referred to above must have been received by the Contractor on its account number at [ Name and address of Bank ] This guarantee shall expire, at the latest, 21 days after the date when the Employer has received a copy of the Performance Certificate issued by the Engineer Consequently, any demand for payment under this guarantee must be received by us at this office on or before that date This guarantee is subject to the Uniform Rules for Demand Guarantees, ICC Publication No 458 Signature(s): The Guarantor shall insert an amount representing the amount of the second half of the Retention Money or if the amount guaranteed under the Performance Guarantee when the Taking-Over Certificate is issued is less than half of the Retention Money, the difference between half of the Retention Money and the amount guaranteed under the Performance Security and denominated either in the currency(ies) of the second half of the Retention Money as specified in the Contract, or in a freely convertible currency acceptable to the Employer ===>>>>> 105 Annex J F PARENT COMPANY GUARANTEE Brief description of Contract Name and address of Employer (together with successors and assigns) We have been informed that (hereinafter called the “Contractor”) is submitting an offer for such Contract in response to your invitation, and that the conditions of your invitation require his offer to be supported by a parent company guarantee In consideration of you, the Employer, awarding the Contract to the Contractor, we [ Name of parent company ] irrevocably and unconditionally guarantee to you, as a primary obligation, the due performance of all the Contractor’s obligations and liabilities under the Contract, including the Contractor's compliance with all its terms and conditions according to their true intent and meaning If the Contractor fails to so perform his obligations and liabilities and comply with the Contract, we will indemnify the Employer against and from all damages, losses and expenses (including legal fees and expenses) which arise from any such failure for which the Contractor is liable to the Employer under the Contract This guarantee shall come into full force and effect when the Contract comes into full force and effect If the Contract does not come into full force and effect within a year of the date of this guarantee, or if you demonstrate that you not intend to enter into the Contract with the Contractor, this guarantee shall be void and ineffective This guarantee shall continue in full force and effect until all the Contractor’s obligations and liabilities under the Contract have been discharged, when this guarantee shall expire and shall be returned to us, and our liability hereunder shall be discharged absolutely This guarantee shall apply and be supplemental to the Contract as amended or varied by the Employer and the Contractor from time to time We hereby authorise them to agree any such amendment or variation, the due performance of which and compliance with which by the Contractor are likewise guaranteed hereunder Our obligations and liabilities under this guarantee shall not be discharged by any allowance of time or other indulgence whatsoever by the Employer to the Contractor, or by any variation or suspension of the works to be executed under the Contract, or by any amendments to the Contract or to the constitution of the Contractor or the Employer, or by any other matters, whether with or without our knowledge or consent This guarantee shall be governed by the law of the same country (or other jurisdiction) as that which governs the Contract and any dispute under this guarantee shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with such Rules We confirm that the benefit of this guarantee may be assigned subject only to the provisions for assignment of the Contract Date: Signature(s): ===>>>>> 106 Annex K BID SECURITY Bank Guarantee [ All italicized text and any enclosing square brackets is for use in preparing the form and should be deleted from the final product.] Beneficiary: Date [ Bank’s name, and address of issuing branch or office ] [ Name and address of Employer ] BIid Guarantee No.: We have been informed that (hereinafter called “the Bidder”) has submitted to you its bid dated (hereinafter called “the Bid”) for the execution of under Invitation for Bids No (“the IFB”) [ Name of the Bidder ] [ Name of contract ] Furthermore, we understand that, according to your conditions, bids must be supported by a bid guarantee At the request of the Bidder, we [ Name of Bank ] hereby irrevocably undertake to pay you any sum or sums not exceeding in total an amount of [ Amount in figures ] ( ) [ Amount in words ] upon receipt by us of your first demand in writing accompanied by a written statement stating that the Bidder is in breach of its obligation(s) under the bid conditions, because the Bidder: (a) (b) has withdrawn its Bid during the period of bid validity specified by the Bidder in the Form of Bid; or having been notified of the acceptance of its Bid by the Employer during the period of bid validity, (i) fails or refuses to execute the Contract Agreement or (ii) fails or refuses to furnish the performance security, in accordance with the ITB This guarantee will expire: (a) if the Bidder is the successful Bidder, upon our receipt of copies of the contract signed by the Bidder and the performance security issued to you upon the instruction of the Bidder; and (b) if the Bidder is not the successful Bidder, upon the earlier of (i) our receipt of a copy of your notification to the Bidder of the name of the successful Bidder; or (ii) twenty-eight days after the expiration of the Bidder’s bid Consequently, any demand for payment under this guarantee must be received by us at the office on or before that date This guarantee is subject to the Uniform Rules for Demand Guarantees, ICC Publication No 458 Signature(s): ===>>>>> 107 International Federation of Consulting Engineers (FIDIC) World Trade Center II PO Box 311 1215 GENEVA 15 Switzerland Telephone: +41 22 799 49 00 Fax: +41 22 799 49 01 E-mail: fidic@fidic.org WWW: http://www.fidic.org